Jih Sun Financial Holding Co (日盛金控) yesterday said it was not interested in any merger or acquisition deals, refuting market chatter that the small conglomerate is the next battlefield after the acquisition of Polaris Securities Co (寶來證券) by Yuanta Financial Holding Co (元大金控) over the weekend.
Jih Sun made the statement after China Development Financial Holding Corp (中華開發金控) said its plan to pursue synergy remains unchanged despite losing its bid for Polaris to Yuanta.
“We aim to strengthen our businesses and asset qualities at home this year, while pressing ahead with plans to enter China’s asset management market,” Jih Sun company president Chao Yung-fei (趙永飛) told a media briefing.
Despite its modest size, Jih Sun has no interest in entering any merger or acquisition deals, Chao said, adding that major shareholders share this view.
On Saturday, Yuanta struck a deal to buy Polaris for NT$48.9 billion (US$1.69 billion) in cash and via a share swap, therefore boosting its market share from 11.37 percent to 15.72 percent.
Jih Sun has no intention of revising its business or development strategies after the recent acquisition among its peers, Chao said.
“Merger rumors involving Jih Sun are just not true,” he said.
The rumors were deepened by China Development Financial’s remarks that it will keep looking for new merger partners.
“The company has no comments on the marriage [between Yuanta and Polaris], but remains committed to pursuing growth linked to synergistic benefits,” a public affairs official said by telephone.
While consolidation is positive for competitiveness, there was still room for small and medium-sized securities houses to survive and grow since market shares are not equal to profitability, Jih Sun Securities (日盛證券)president Tsai Yu-bin (蔡裕彬) said.
However, Tsai expects the acquisition of Polaris by Yuanta Financial, owner of the nation’s largest brokerage, to benefit domestic securities houses that are in need of guidance on expansion in China.
Yuanta Securities (元大證券) will become the largest brokerage in Greater China after the acquisition takes effect in November, giving it greater leverage in exploring the China market, which remains -inaccessible despite warning cross-strait trade ties, Tsai said.
“If Taiwanese securities houses can’t make inroads in China, they had better abandon the idea of cross-boarder expansion elsewhere, given its geographic closeness and cultural similarity,” Tsai said. “Smaller firms can learn lessons from Yuanta, whose large size allows room for mistakes during the course.”
Acquisition rumors helped raise Jih Sun shares 2.17 percent to NT$14.10 at the close of trade yesterday, compared with the main index’s 0.16 percent fall.
Polaris share ended up 1.21 percent at NT$20.85 on an 11.17 percent premium, while Yuanta stock dropped 3.5 percent to NT$20.65.
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